Uncertainty about film incentive already showing impact

Published: Tuesday, April 23, 2013 at 6:07 p.m.

Last Modified: Tuesday, April 23, 2013 at 6:07 p.m.

Film producers with roots in the state have already been shaken by the introduction of a bill supported by two local lawmakers that could gut the film industry even though that bill appears to be dead on arrival, said one member of the N.C. Film Council, which met Tuesday afternoon.

Vice Chairman E.A Tod Thorne read an email from a Facebook account of a film producer who planned to shoot in Charlotte but was considering switching to Georgia because of the uncertain climate for film production in North Carolina.

“He’s very sad about leaving North Carolina,” Thorne said. “He’s very sad about not being in his home state and his home town and that his producer has made the decision to go to Atlanta.”

Thorne blamed the uncertainty that has stirred the film industry on the introduction of House Bill 994, which doesn’t kill the film industry but effectively guts it, detractors say.

The bill is supported by two local lawmakers, Reps. Rick Catlin and Chris Millis, who say they want to shed some light on how the film incentive works – and how it’s different from other tax incentives. Catlin likened it to a “grant” rather than an incentive, allowing film industries to walk away with millions in taxpayer dollars for very little loyalty to the state of North Carolina.

But those who oppose the measure say the bill’s sponsors don’t understand the unique nature of the industry – the jobs and tourists it attracts – and the hubbub over the bill may have already hurt business.

“It’s hard to put the genie back in the bottle once somebody puts out a bad idea,” said John Merritt, a lobbyist who represents the film industry.

Members of the council, meeting in Raleigh, discussed ways they could dispel concerns, such as through studies spread via social media.

Commerce Secretary Sharon Decker drew applause when she announced her unwavering support for the film industry and the jobs it brings to the state. Decker said the state has to be smart about tax reform and create a more competitive business environment. But on the film incentive, she said, “we have to have them to play the game.”

Decker encouraged council members to tell an accurate and compelling story about how the film industry has grown jobs and opportunity.

Other council members said they would continue to lobby legislators about the negative effects of the bill even though House Speaker Thom Tillis has suggested it won’t move from the House rules committee, where many measures go to die. But film council Chairman Bob Seligson pointed out that a bill is not dead until it’s dead, dead, dead.

“It’s great to hear the bill’s dead, but it’s not dead until the final gavel comes down on the legislative process,” Seligson said.

Under state law, film production companies can claim a 25 percent tax credit – up to $20 million – on productions spending more than $250,000 in qualifying expenses. If passed, House bill 994 would eliminate that credit and, instead, waive any tax liability the company accrues over the next five years up to an equivalent amount.

Because only companies based in North Carolina pay the taxes that would be waived, only a fraction of the films that do business in the state would reap any benefit under the law, according to Wilmington Regional Film Commission Director Johnny Griffin.

But despite widespread criticism, Catlin is standing behind his opposition to the state’s film tax credit as written. He didn’t attend a rally that drew hundreds to Wilmington this weekend opposing his support for the measure though the rest of the delegation, minus Millis, showed.

Despite the criticism, Catlin said his measure could end up being the savior of the film industry in North Carolina as legislators consider doing away with all incentives, including film incentives.

“Ultimately I’m against taking taxpayer money and picking and choosing which company gets incentives and which ones don’t,” said Catlin, R-New Hanover. “This bill, however, could provide some assistance to the film industry if incentives are sunset across the board.”

Asked if he was worried about backlash in the next election for such an unpopular move in the Wilmington region, Catlin responded: “I do what I think is right.”